Allowed

M/S.Mukand Ltd. v. State

Orissa HC10 Apr 2019WP(C)/3117/2004

Case brief

AI extract

What is this about?

The Court allowed a writ petition challenging the inaction of authorities in paying interest on a refund amount. Relying on Supreme Court precedent, the judgment held that the petitioner is entitled to @8% interest from the date of assessment until payment, as statutory provisions in case were held intra vires.

What did the court decide?

Interest on the refund amount granted @8% per annum from the date of assessment for the relevant year till the date of payment.

M/S.Mukand Ltd. Vs State — GST and Indirect Tax | Orissa HC (2019)

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W.P.(C) NO.4657 of 2004

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10 10.04.2019

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Heard learned counsel for the petitioner and learned counsel for the State.

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By way of this writ petition the petitioner has challenged the inaction on the part of the opposite parties in paying interest on the refund amount. Now the issue is covered by the decision in IDL Industries Ltd. and others versus State of Orissa and Others (and other cases) as reported in (2004) 134 STC 62, more particularly paragraph-94 is reproduced hereunder:

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“94. In view of the foregoing discussions, we answer the questions referred to us/formulated by us in the following manner: (1) No direction can be given for grant of interest in a case where reassessment has been directed and is pending. (2) Sections 14 and 14-C, even though they have not provided for payment of interest on the refundable amount from the date of deposit, are intra vires and are not violative of articles 14 and 19(1)(g) of the Constitution.

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(3) Even though there is no time prescribed for completion of the reassessment proceeding after assessment has been set aside, this Court has no power to specify a period for completion of such proceeding as the High Court has no power like article 142 of the Constitution.

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(4) The provision contained in section 14-D of the Act empowering the Commissioner to withhold refund is within the legislative competence of the State Legislature. But during the period such refund is withheld, interest is payable to the dealer as provided under section 14-C of the Act.

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(5) No direction can be given specifying a period during which the refund proceeding should be processed and disposed of. But interest would be payable to the dealer for the delay in granting refund. If the delay is attributable to the negligence and/or inaction of any period, interest shall be recovered from such

m/a

person.

(6) When a dealer is directed to deposit some amount as per the orders of the High Court and the Supreme Court, he is entitled to get compensation by way of interest on the amount of refund ultimately calculated from such date at such rate as is directed by the said Courts.

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(7) Though there is an unprovided field during which period no interest is payable by the State, no direction can be given by this Court unless it is covered by question No.5 above.

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(8) The conditions mentioned in the case of Tata Robins, [1989] 75 STC 277 (Orissa), such as prima facie nature of the case, balance of convenience, loss and injury to be suffered by either party and other germane factors have to be taken into consideration while dealing with the interim matters of stay of the disputed demands under the provisions of the Act.”

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In view of the direction of the Hon’ble apex Court in paragraph-6 of the aforesaid reported case, the petitioner is entitled to interest on the refund from the date of assessment for the relevant year @8% per annum till the date of payment.

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The writ petition is allowed to the aforesaid extent.

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…………………………..

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K.S.JHAVERI (CHIEF JUSTICE)

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…………………………….

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BISWANATH RATH (JUDGE)

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M/S.Mukand Ltd. v. State

Case brief

What is this about?

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M/S.Mukand Ltd. v. State

Case brief

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